Crypto and Commerce: Wealthy Londoners Are Paying Rent With Bitcoin

It is 2024, and the $2.9 trillion cryptocurrency sector doesn’t appear to be going anywhere.

That’s despite a 2022 and 2023 that saw the total market capitalization shrink down over half from earlier 2021 highs to $1.4 trillion amid a spate of scandals and scams.

But volatility is the digital asset landscape’s bread and butter, and in the past two weeks alone, bitcoin both broke its previous all-time-high of $68,000 and has successively gone on to create new ones.

The nominal crypto asset is currently trading at around $72,000 as of this reporting — leading many observers to ask, where is their utility to be captured within the space outside of leveraging digital assets as a store of value?

After all, what use is a store of value if you can’t transfer, transact or transfigure the underlying concept of value into a superseding realization of it?

This, as a high-end luxury real estate firm is being paid in crypto for a 45,000 pounds (around $57,000) a week for a rental apartment in London, and just announced it is now listing luxury homes for sale in cryptocurrencies as well.

“Sellers at KPP now have access to a broader pool of potential buyers, particularly those with substantial cryptocurrency holdings worldwide. Cryptocurrency transactions offer faster clearance of funds compared to traditional bank wires, eliminating common transaction delays. Sellers can benefit from premium valuations for their properties, attracting buyers with more fluid purchasing power,” the company, Knightsbridge Prime Property, said in a statement.

And it isn’t just the U.K. where crypto owners can turn their digital assets into physical ones. Earlier this month, a $4 million-plus house on the Jersey Shore in New Jersey hit the market, with the seller accepting bitcoin for payment.

But, for better or worse, cryptocurrency payments have long been associated with luxury items. When end-users are able to purchase daily goods and services, like their proverbial morning cup of coffee, that is when crypto as a payment vehicle will truly be democratized.

But, given the volatility endemic to the sector and the incentive structure that characterizes the landscape, will that ever happen? 

See also: Crypto Continues to Serve as Case Study in Behavioral Economics

Can Crypto Payments Create a Trickledown Effect? 

As Knightsbridge Prime Property noted, using crypto for payments offers the advantage of faster transaction settlement compared to many traditional methods, as well as gives buyers an attractive, real-world outlet for their crypto holdings.

The real estate firm is using Bitcashier, a cryptocurrency trading platform, to support its offering.

As crypto values surge, the marketplace is responding to the need for platforms that enable crypto acceptance for transactional purposes. 

That’s because, while the adoption of cryptocurrencies is growing, they are still not widely accepted as a form of payment compared to traditional currencies. Many merchants and service providers do not yet accept cryptocurrencies, limiting their utility for everyday transactions.

As PYMNTS reported Jan. 15, business-focused cryptocurrency payment gateway PTPShopy launched to help firms accept payments in cryptocurrency.

Elsewhere, cryptocurrency payments company Baanx announced last week it had raised $20 million in Series A funding, which it plans to deploy to help it introduce its services in the U.S. and Latin America.

One hurdle crypto payments will need to overcome is the fact that cryptocurrency transactions are typically irreversible, meaning once a transaction is confirmed on the blockchain, it cannot be undone. This lack of recourse can be problematic in cases of transaction errors or disputes.

Read more: JPMorgan: Crypto Market Enthusiasm May Be Misplaced 

Turning Crypto Payments into Daily Drivers 

PYMNTS looked at the advantages of crypto payments last month in a conversation with Brad Chase, head of liquidity products at enterprise crypto solutions company Ripple, who pointed to studies that show up to a 70% cost reduction by going from traditional rails to crypto.

“Crypto is a digitally native global asset,” Chase said in an interview with PYMNTS. “And if you think about this new digitally native, tech-savvy customer segment that is emerging, they hold crypto, and they want to use it for payments.”

“One of the key advantages of crypto payments lies in the rich data source they provide … which enables effective compliance, fraud prevention, and valuable customer insights,” Chase said, pointing out crypto payments give businesses the chance to leverage data-driven strategies to enhance their operations, gain a better understanding of their customers and generate added revenue.

Additionally, when it comes to crypto’s benefits, “a lack of familiarity can lead to a lack of comfort, which will often lead to a lack of adoption,” Ajay Rajani, vice president of expansion and crypto at Tala, told PYMNTS.

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